38% of residential sites purchased by foreign investors in 2016

The quantity of Australian residential development sites purchased by Chinese developers and investors has risen by 12 per cent in 2016.

According to the latest report from Knight Frank, The Rise of Chinese Developers in Australia – Market Insight: January 2017, Chinese developers and investors purchased $2.4 billion worth of residential sites in 2016.

This is a rise of 12 per cent from 2015, and a total rise of 36 per cent from 2012.

“At this time, the Australian dollar became very favourable against other currencies for investment into Australia. The Chinese renminbi was no exception,” said Knight Frank's head of residential research, Australia Michelle Ciesielski.

“Opportunistic developers, many for the first time, considered Australia to build their next development after becoming a household name in homeland China. It was considered, and still is to some extent, worth the risk to build a first-time signature development (even if profitability resulted to just be break-even) to be accepted as a reputable developer by the local Australian market,” said Ms Ciesielski.

The figures are still 11.2 per cent lower than the peak, which occurred in 2014, and overall total sales fell in 2016, but Ms Ciesielski still believes the Chinese influence on the market has grown.

“Long-term strategies must now be devised to allow for the Chinese government tightening the ease of outbound capital flow, and local lenders limiting funding to control their liquidity and satisfy APRA requirements,” said Ms Ciesielski.

“But one thing is clear – Chinese developers are determined to succeed in Australia, and for many generations to come,” she said.

38% of residential sites purchased by foreign investors in 2016
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